GeoEye and DigitalGlobe plan to merge

In a move that the geospatial industry had been expecting, on Monday, GeoEye announced plans to combine with competitor DigitalGlobe in a deal worth $900 million. This move is in response to the National Geospatial-Intelligence Agency informing both companies that it plans to curtail funding for its $7.3 billion EnhancedView contract, pieces of which were awarded to both firms in 2010.

The two former competitors provide photos and satellite imagery from satellites that are contracted by the NGA, the products of which are generally sold to federal agencies, the military and other government institutions.

We have covered GeoEye’s attempt to acquire DigitalGlobe for $792 million back in May of this year, an offer that was rejected because DigitalGlobe felt it was better positioned to weather the NGA’s announced slowdown.

Perhaps GeoEye was more eager to close the deal after they learned last month that its funding for the next fiscal year may be delayed or reduced unless Congress puts more money into the program. Even with the proposed reduction in support, DigitalGlobe, received full funding for its contribution to the contract.

DigitalGlobe expects the merger will save $1.5 billion, predominantly in the reduction of expenses regarding building and launching satellites.

Tags: DigitalGlobe, EnhancedView, GeoEye, geospatial, GIS, National Geospatial Intelligence Agency, satellite imagery, satellites

Categories: DigitalGlobe, GeoEYE

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